Councilman proposes change to Philly bidding system to boost small businesses

Philadelphia Councilman Derek Green proposes changes in the city’s bidding process to give small local businesses a better chance of winning contracts under $100,000.

City Councilman Derek Green. (Emma Lee/WHYY)

City Councilman Derek Green. (Emma Lee/WHYY)

Philadelphia Councilman Derek Green wants to make it easier for small businesses to win contracts with the city.

“This would help us to keep dollars in the city of Philadelphia, in our small businesses, in our commercial corridors, which helps us address poverty,” said Green, who is up for re-election this year and has tried to craft a reputation as a regulation-cutting advocate for small businesses.

The bill would lower the barrier to entry for small contracts, increasing the maximum dollar amount that would trigger the formal request for proposal process, which Green said small and minority-owned businesses have found difficult to compete within.

Currently, the RFP process is triggered for contracts over $34,000. The bill would raise that ceiling to $100,000 for local businesses and $75,000 for all businesses.

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Green said he got the idea from talking with colleagues at the National League of Cities, who informed him that the RFP-trigger on Philly’s procurement limit is unusually low.

The idea is to create a middle tier of contracts in the city’s procurement process. Raising the limits that trigger an RFP for local businesses will very likely aid minority-owned businesses, because Philadelphia is a majority-minority city.

“We procure all kinds of things, things as small as paper or paper clips, you name it, anything that that a city of this size needs to buy — but we have to do an RFP for anything over $34,000,” said Green.

Green said that the bill will reduce the number of days it takes to execute these smaller contracts, from 110 days to a month.

It would exempt contracts for constructing or remodeling buildings, which means that none of the $500 million being spent on libraries and recreation centers under the Rebuild program would be exempt.

Skeptics might note that $100,000 isn’t that much. But small-business advocates contend that, if the city’s charter can be amended with Green’s proposal, it will give local business an entry point to the contracting system.

“For local independent businesses, it’s a barrier to just get their foot in the door,” said Eliza Alford, government relations manager for the Sustainable Business Network of Greater Philadelphia. “This will give them a chance to prove that they can meet a contract. This will be a great starting point.”

This change would require tweaking the city charter and must be put to a citywide vote.

If Green’s bill passes by the end of this Council session in June, it would be put on the November ballot for residents to vote on.

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